Zomato is a private food delivery organization that is currently famous throughout the world as a primary source of fulfillment for many. Did you, however, know that Zomato also sold itself just like UberEats? Quite shocking!
Zomato has recently agreed to sell its UAE business to another company, Delivery Hero. How do you think that happened? The company is one of the biggest competitors for companies like Swiggy.
Indeed, the company must have been going through either losses or required changes to take this step.
History of the Food Delivery firm
The food delivery company reached a 10-year milestone last year in July. Originally, the company was established back in July 2008 by Pankaj Chaddah and Deepinder Goyal, two individuals of IIT Delhi alumnus. Goyal had this idea because of constant urge by his colleagues for a requirement of paper menus of all the restaurants. He decided to have a digital app to make things more accessible.
From that day on, the two partners set off in their journey and became one of the primary food delivery companies in India. Moreover, that is how an Indian restaurant search and discovery service started.
At present, the company has been aiming to reach higher and become an effective international platform that can help millions of individuals across the world.
Since the competition is high, Swiggy, Online food ordering company, has started to take up the stage with 14 million monthly orders. Zomato has only about 10.5 million while 1 million goes to UberEats. Such aspects show that the fight between Zomato and Swiggy food delivery is apparently high.
What exactly happened with Zomato?
The bigger plans have led the company to take this particular step in the UAE. The rising competition has enforced the company to raise capital higher for the benefit. Notably, the company is doing this by selling current assets.
Zomato entered the market of UAE back in 2012 that attained a lot of fame and prestige in the country. However, considering the new situation, the asset is considered as an object of selling to collect more capital.
Earlier, it was thought that they would sell the UAE branch at $200 to $250 million. The online food delivery company, after the finalization, the company finally sold at $172 million in exchange for the UAE unit. Furthermore, Delivery Hero would also get about 26.38% share of the total profit of Zomato. Certainly, the delivery hero investor relations is better enough that had enforced Zomato to choose it.
Aspects other than the food delivery service such as Zomato Gold and And Sales are not considered the critical part of selling deal with Delivery Hero. Talabat Middle East Internet Services Company LLC, a fully-owned subsidiary, will execute the agreement according to the German company.
Niklas Östberg said, “Zomato has built a successful food delivery business in the UAE and India on the back of its restaurant search and discovery app and website. The acquisition will allow us to further improve our service to customers in the UAE.”
According to CEO Goyal, “I am delighted to welcome Delivery Hero as a partner and shareholder and look forward to learning from their global experience to help us strengthen our fast-growing India food delivery business.”
How social media reacted to this news?
People are surprisingly shocked over both Twitter and LinkedIn with the news. However, everyone is typically watching Food Delivery with keen eyes to watch their next step.
— OnetoOne ILO Consulting (@OnetooneC) March 5, 2019
Some of the individuals on LinkedIn see this step of Zomato as a smart move. The company wanted to focus on food delivery in india business.
Also, Delivery Hero will invest another $50 million in the global business of Zomato
Finally, @Zomato sold out UAE biz (except Gold and Advertising) in $172 Mn to @deliveryherocom https://t.co/skcEvOB9rM . Additionally, Delivery Hero committed to infuse additional $50 Mn in Zomato's global business.
— jaivardhan (@jaivardhan88) March 4, 2019
The Food Delivery company has decided to offload its UAE business to get more capital. The company has been planning to get more help to expand. It desires to become one of the primary aspects of the entire world.